AspImage, LZW and the Unisys Patent on GIF/LZW

AspImage, LZW and the Unisys Patent on GIF/LZW
or
Trying to Operate Legally and Compete In the Marketplace

AspImage Supports RLE GIF, Not LZW

GIF support in AspImage uses RLE encoding. RLE is not patented by Unisys as the LZW algorithm is. Therefore we are free to provide copies of AspImage which use RLE encoding. The LZW is better than RLE in compressing images. The downside to LZW is that Unisys wants $1500/per year/per Web server from you, last we heard, to use LZW.

No Time for Small Fries

In early July 1997 Unisys was contacted for a license to use GIF/LZW in AspImage. The Unisys legal clerk, [name excised], sent a product profile questionnaire to determine what type of product AspImage was; what type of distribution channels would be used and so forth. After returning the questionnaire to this clerk, the Unisys LZW legal department sent an e-mail stating, "We are unable to license you, as we require licenses directly with the web site operator for this type of application."

The Unisys clerk then contacted us to ensure that we would remove LZW from AspImage. Since they would not license us, but wanted to license the Web Server operators, we replied in the negative, that LZW support would indeed be included. If Web Server operators needed a license, that was between Unisys and the Web Server Operator. We still wanted to support LZW.

Unisys responded by warning us that we would be "willfully infringing" on their patent and could be subject to legal action, possibly by Web server operators that were using our product without a Unisys license. Of course, the ever benevolent Unisys probably wouldn't sue us but things could get nasty in a patent infringement case... hint... hint... This left us, not only in shock, but in no-man's land where we could not deliver an LZW enabled product.

Unisys was locking us out of LZW support without any options. They made it clear that they would not license LZW for use in AspImage and that we'd better drop support for LZW. We had no choice but to remove the support that was being added for LZW. We informed Unisys that LZW would be removed from the product. But we were very unhappy with the situation. As far as we were concerned, this was a one-two punch that prevented us from fairly competing in the market against others who were already using LZW, though, they probably didn't even attempt to get an LZW license in the first place!

This was quite frustrating. A lot of customers wanted GIF support. A few customers wanted LZW support and we wanted to deliver it to them. I don't give up easily, so...

I then made a call to the Unisys lawyer to find out how to clear up the issue so that we could legally include LZW support within AspImage. Their lawyer instructed us that Web server operators were required to pay Unisys $1500 per year/per Web server for an LZW license. After they obtained the Unisys license; provided proof of said license; and purchased our AspImage license; then we could release a GIF/LZW enabled copy of AspImage to our mutual licensee. Fair enough. This is what we have required of all our customers that requested LZW support since that time.

Furthermore during that phone call with the Unisys lawyer, we requested that a standard GIF/LZW agreement be faxed to us. We did this in an attempt to further understand the Unisys requirements for LZW licensing. What we wondered was how far the Unisys claim went. Were GIF images legal to put on a Web server without an LZW license? We had many questions about the extent and implications of their patent claims. The Unisys clerk now claims that faxing this agreement was an attempt on their part to sign an agreement -- despite the clear statement they had made just days earlier, based upon the product profile that "We are unable to license you, as we require licenses directly with the web site operator for this type of application." And directly contrary to the conversation I had held with the Unisys lawyer in 1997.

"Yes grasshopper, up is down, left is right." And the English language is quickly becoming dysfunctional due to "spin."

Either they were able to license, or they were unable to license, this type of application. I assume the techno-savvy legal department at Unisys is charged with determining things like that. One would assume that's what the product profile was about. They had the facts of the product profile before them and they determined that "we are unable to license you..." If it is true that they expected us to sign a license at that point then:

Why the initial rejection based upon the product profile?
What does the statement "we are unable to license you" mean? Is this a crypto-legal sentence only understandable by a special initiate or should it not be interpreted in accordance with mainstream use of the English language?
Why were we given different instructions on the phone by the Unisys lawyer?
Why didn't they follow up on this until almost 2 years later? Our Web site has been publicly available since early 1997.
The lawyer stated on the phone call of April 28th, 1999 that they had been turning away licensee requests because ServerObjects Inc was not licensed for LZW use. Was this for one day or for months or longer? And they were not aware of the product or documentation which specifically informed users that to get an LZW enabled version they would need a Unisys LZW Web Server license?

Those are just a few questions we have and we aren't even lawyers! The answer: because they were "unable to license" us -- in other words they didn't want to bother with a small-time developer who wouldn't deliver the $$.

It was our mistake to request the agreement after being denied a license. It was only logical though that we'd try to understand the Unisys claims and the extent of the claims considering the large number of LZW compressed images out there. We do our best to abide by the laws of the land and you'd have a difficult time abiding by them if you didn't make a reasonable attempt to understand what the laws are.

If we had not been attempting to respect the Unisys patent and operate legally, paying Unisys their fees and royalties for use of the LZW technology, we would not have taken the initiative to contact Unisys in the first place. We did not wait for them to contact us with a "cease & desist" letter. In fact we had not even released any LZW enabled product. Appropriately, we wanted to get the paperwork cleared up first. In good faith we have done our best to fully respect the rights, requirements and patent of Unisys throughout this process. Following their dictates we never released a public copy of AspImage with LZW functionality.

I'd like an order of AspImage and "Double-Size It" Please

On April 27, 1999 @ 1:05 PM [name excised], the clerk from Unisys, contacted us to let us know that a letter had been mailed to us concerning the LZW issue. A potential ServerObjects Inc. customer wanted LZW support and contacted Unisys. He referred Unisys to our Web site. The Unisys LZW legal department then determined, without a product profile, that AspImage required a license from Unisys. They informed us via e-mail that a letter had been mailed "concrning [sic] these situations on April 23".

Rather than wait to see the letter, the Unisys lawyer was once again phoned the afternoon of 27th April 1999. Apparently ServerObjects Inc. looks lucrative now because Unisys wants a licensing fee and royalties from ServerObjects Inc. in addition to Web server operators paying a yearly licensing fee. This is like double taxation on something that Unisys long treated (by failing to enforce their patent rights) as free and public domain. If you are not familiar with the GIF/LZW read the history of the CompuServe GIF/LZW controversy.

It is interesting to note that initially, during our phone conversation, that they did not realize that we had attempted to obtain a license for AspImage from Unisys back in 1997. There was "no file"on our previous discussions but later after we produced part of the e-mail exchange that had taken place, proving that we had indeed attempted to obtain a license and that they refused to license LZW for AspImage's usage they "located" their file. But the facts were relegated to the circular archives of irrelevance with the statement "it really doesn't matter. You need a license." Sorry but... no we don't...

No Time for Corporate Profit Games

... or corporate double dipping via its legal department.

Even if we signed a license agreement with Unisys today, I'm not sure if they would consider it a valid license next year based on how they've handled our case. The Unisys clerk wouldn't even admit the facts of the case: that they refused to license AspImage for LZW usage in 1997 when we requested a license. Yes, we wanted to pay Unisys a license fee plus royalties, but they didn't want to do business with a small fry. I guess facts "really don't matter" to some folks.

LZW support is no longer available to anyone for any price under any conditions, even if "Mr. Unisys" himself approves it. We are sorry this is the case. If a customer absolutely needs LZW they will need to find a different product that supports it. Of course, we're not lawyers and cannot give legal advice but for legal security's sake, we hope you can find one that is actually "licensed" for LZW use by Unisys.

We've had a very limited number of requests for LZW support over the last 1.5 years. This is staggering, in our opinion, considering the number of AspImage licensees. It isn't staggering when you consider what Unisys wants for a Web server LZW license each year.

Further we suggest customers avoid LZW use if at all possible. We believe that there are better alternatives available today.

After the GIF/LZW case arose years ago, it was said by some that Unisys could not compete in the market and so turned to their legal department for financial help. I'm not sure if this is the case but we believe our experience gives credence to that idea.

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